Unit 3: Interests in Real Estate

Question 1

What are the 4 government rights in land?

Answer 1

PETE
Police Power
Eminent Domain
Taxation
Escheat

Question 2

What is Eminent Domain?

Answer 2

The Right to take PRIVATE LAND for public use

Question 3

What is Police Power?

Answer 3

PUBLIC CONTROL of land
Right to enact and enforce laws governing land use
Planning, zoning, building codes, permits, inspections,
Determines how land can be developed

Question 4

What is Condemnation?

Answer 4

The process used to take private land and use it for public use i.e. highways

Question 5

Taxation

Answer 5

Real property taxes and special assessments
Enforced by a tax forfeiture lien

Question 6

Property Lien

Answer 6

An obligation that has to be met, example: Mortgage, Taxes, if these are not met, the property can be taken

Question 7

Special Assessments

Answer 7

Charges against a property that benefit from a public improvement
Examples: Paving, curb/gutter, street lights

Question 8

What is the most powerful lien?

Answer 8

Property tax lien

Question 9

Escheat

Answer 9

Governments reversionary right to take property that has been abandoned

This is exercised when a person dies with NO will (Intestate) and without heirs, the property goes back to the state

Question 10

What is an Estate

Answer 10

An interest or right in real property that allows or will allow possession

Question 11

What are the two types of Estates?

Answer 11

Freehold estates
Leasehold

Question 12

What is Freehold Estate

Answer 12

Ownership for an indefinite duration

Question 13

What is Leasehold estate?

Answer 13

Possession (not ownership) for a fixed term

Question 14

What are the 3 types of Freehold Estates?

Answer 14

-Fee Simple Absolute (buy/sell): Most complete (Maxiumum ownership estate), lasts indefinetely
-Fee Simple Defeasible/Qualified Fee (may own as long as you don’t do this, or may own as long as you do this) Example: Someone donating a chunk of land and operate it as a nature preserve
-Life Estate: lasts for their life: Upon death of the

Question 15

4 Types of Leasehold Possession

Answer 15

Estate for Years
Periodic Estate (renting)
Estate at Will
Estate at Sufferance

Question 16

Right of Possession: Leasehold Estates

Answer 16

The purchaser of a leased property obtains ownership “Subject to” the lease
Ex: If you buy an apartment complex, those leases go with the purchase

Question 17

Periodic Estate (tenancy)

Answer 17

Ex: Renting month to month

Question 18

Estate tenancy at will

Answer 18

Tenant occupies at landlords discretion
No agreement specifying term and payment of rent

Question 19

What are the 4 Encumbrances

Answer 19

Deed restrictions
Lien
Encroachment
Easements

Question 20

What is an Emcumbrance?

Answer 20

An encumbrance is any claim, right or interest held by a party who is not the legal owner of the property

Encumbrance is an appurtenance attaches to and binds real property

Question 21

Easement

Answer 21

The Right to use the land of another for a specific purpose (Using another persons land to get to your land) Easements transfer with deed PERMANENT

Question 22

What is an Easement in gross?

Answer 22

A commercial easement held by a company, government or person
Has no dominant property, only servient property
Ex: Irrigation ditches

Question 23

Easement in necessity

Answer 23

Court-ordered easements
OWNERS CAN NOT CREATE LAND LOCKED PROPERTY
Created when an owner sells or contiguous parcel of land that has no legal access

Question 24

Deed restrictions must be for what?

Answer 24

LAWFUL PURPOSES
Deed restrictions may be more STRICT than zoning

Question 25

What is a Lien?

Answer 25

A claim on land to secure payment of debt

Allows creditor to take and sell the property if not paid

Question 26

What is a homestead exemption

Answer 26

It’s created by state statue to protect a primary residence from unsecured creditors

Question 27

What is an Encroachment?

Answer 27

YOU’RE ON MY PROPERTY
Ex: A tree limb that extends into neighbors property

Question 28

What is a License?

Answer 28

Revocable permission that grants a privilege to use the property

NOT A RIGHT - but permission to use

Can be taken away by grantor at ANY time